Lowering tax audit compliance risk for small businesses

Are you running a small business, and have a Point of Sales System or POS and always rely on it to record the sale. Please read on, as the law had changed for the point of sales system, and if you are not careful, your business might be caught with potential serious tax audit risk.

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It is illegal from 03 October 2018 to produce, supply, use and possess electronic sales suppression tools (ESSTs) since the first introduction of the Treasury Laws Amendment (Black Economy Taskforce Measures No.1) Bill 2018 on 7 February 2018 (ATO), finally had passed on 18 September 2018 (Act 121, 2018).

The proposal is to “clean business” and “promote good tax behaviours” from the establishment of the Black Economy Taskforce development by the Turnbull Government (The Treasury) to commit $32 billion funding from ATO to extend audit and compliance it the Budget 2017.

The Government is giving the small business people a concessional date to the 3 April 2019 to come forward and disclose to ATO if you use such a sales suppression POS machines, if you do that, you only need to pay the shortfall tax, and not paying the penalty. However, there are some conditions you need to meet in order for that concession to apply, hence please talk to one of the most trusted and professional and responsive accountant and tax agent in Ashfield Sydney on 0410-829-900, or email John on Jc@endurego.com.

Schedule 1 of the Amendment in Subdivision BAA states that ESSTs means a device, software program or anything, a part of such thing, or a combination of any such things or parts, that meet the following conditions:

(a) It is capable of falsifying, manipulating, hiding, obfuscating, destroying, or preventing the creations of a record that: (i) an entity is required by a taxation law to keep or make; and (ii) is, or would be, created by a system that includes an electronic point of sale system; (b) a reasonable person would conclude that one of its principal functions is to falsify, hide, obfuscate, destroy, or prevent the creations of, such records.

The offences impose on sales suppression technology and software which allow business to manipulate and destroy selected transactions to understate their income can be capped 5000 penalty units ($1 million) for producing, supplying, possessing, using or selling EESTs.

This amendment raises a serious concern for taxpayers who are using POS in daily business transaction and wonder if they are at risk relating to these changes.

As one of the most trusted accountant and tax agent in Ashfield Sydney, we are here to help you to review your business in term of the potential audit risk and how is your business dealing with the risks.

In order to protect your business from Audit RIsk from the ATO, please come and talk to one of the most trusted accountant and tax agent in Ashfield Sydney, we will help you with the audit risk by providing a free 20minutes initial consultation to look at your past tax return and financial statement to give you an overview of your position in term of the audit risk and we will also during these 15minutes provide some recommendation to mitigate the risks. Please give us a call on 0410-829-900 or email me on jc@endurego.com. Please remember do not leave it too late.

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